FINANCIAL LITERACY MONTH
April has been designated as Financial Literacy Month. Wait. What? Why is this a thing?
According to Go Banking Rates, over 50% of Americans have less than $1,000 in savings. Yep. It’s pretty bad out there folks. Lots of credit card debt carried month-to-month. Those who have an investment account using it for monthly expenses. To combat this, our country needs a combination of things that will alert citizens to the financial reality they are facing. To start, workers need skill sets that keep pace with a rapidly changing world and wages that at least track inflation and rise with productivity gains. Workers need to be educated on the importance of regular savings especially with the rapid decline of pensions. To that end, I have put together a short financial literacy quiz that will test your basic understanding of some financial topics.
- Suppose you have $100 in a savings account earning 2 percent interest a year. After 5 years, how much would be in the savings account?
- More than $102 Less than $102 C. The same D. Don’t know
- Imagine that the interest rate on your savings account is 1 percent a year and inflation is 2 percent a year. After one year, would the money in the account buy more than it does today, exactly the same, or less than today?
- More Same C. Less D. Don’t know
- If interest rates rise, what will typically happen to bond prices?
- Rise Fall C. Stay the same D. No relationship
- A 15-year mortgage typically requires higher monthly payments than a 30-year mortgage but the total interest over the life of the loan will be less.
- True False C. Don’t know
ANSWERS: 1. A 2. C 3. B 4. A
Lighthouse Financial Coaching is an Austin-based company dedicated to helping regular families and individuals become organized with personal finance and begin to win with money and move forward to achieve their financial dreams and goals. Schedule your free introductory consultation today.
Phone: (512) 971-6739